“In many ways, mortgage products such as RMBS were ground zero in the financial crisis,” Robert Khuzami, director of the SEC’s Division of Enforcement, said in a statement. “Misrepresentations in connection with the creation and sale of mortgage securities contributed greatly to the tremendous losses suffered by investors once the U.S. housing market collapsed."

Khuzami is co-chair of a working group of federal and state law enforcement tasked with pursuing cases stemming from the causes of the financial crisis. The working group also recently brought a separate case, its first, against JPMorgan related to Bear Stearns, which JPMorgan acquired in the financial crisis.

The banks did not admit or deny allegations as part of the settlement.